6 Tools That Can Help You Boost Your Credit Score This Year

Building credit takes time and vigilance, and that's especially true if you need to repair credit problems from the past. If you have a history of late payments, debts in collections, or a bankruptcy, for example, you can't expect your credit score to fix itself.

Fortunately, there are some apps and online tools that can make improving your credit score easier. Some of these tools are free and easy to use, while others require a bigger commitment. If you know your credit score needs help but you need help to move it along, consider these apps and strategies.

1. Self Lender

If you need to build credit from scratch but can't yet qualify for a credit card or loan on your own, you may want to consider a "credit builder loan." To understand how these work, you need to forget about the usual notions of why you borrow money. In this case, you're only taking out a loan in order to build credit.

With a credit builder loan from Self Lender, the amount you borrow is held in an interest-bearing CD and you don't see it until the end of the loan term, which is 12—24 months. You make regular monthly payments, which are reported to the three credit reporting agencies — Experian, Equifax, and TransUnion. Once the term is complete, you'll get the funds back you paid in. In that sense, a credit builder loan is like a forced savings account.

In addition to a small administrative fee, you'll also pay interest on your loan. As an example, if you take out $1000, you'll pay $89 per month for 12 months. After 12 months you get $1000 back. That ends up being an additional $68 in interest that was paid out over the course of 12 months, plus a $12 administrative fee. That's a total cost of $80.

2. Credit Karma

If you want to improve your credit score, you need to find out what it is — and be able to track it regularly. One of the best ways to do this is by signing up for a program that offers a free estimate of your credit score every month.

Credit Karma is a service that does just that. Once you sign up for a free account, you can check your credit score whenever you want, see all your debts in one place, and monitor hard inquiries on your credit reports. You can also get information on reasons your credit score has gone up or down, and steps you can take to fix problems or avoid having your credit score drop in the future. (See also: The 5 Things With the Biggest Impact on Your Credit Score)

Finally, you can sign up for alerts that will let you know any time a new account is opened in your name. This can be helpful for avoiding identity theft.

3. Mint

Mint is a service that offers to help you manage your money so you can "get more out of your life." The website does this by offering a free credit score along with budgeting and bill-paying tools.

Once you sign up for a free account with Mint, you can see all your finances in one place, including your debts, your spending transactions, and your bills. You can also monitor your investments and use the app's tools to set budgets and find creative ways to spend less.

While many of these features are aimed at helping you control your finances and boost your net worth, having a place to monitor your debts and keep track of bills should inevitably help you improve your credit score over time.

4. Debt Snowball Calculator

If you're deep in debt and ready to dig your way out, one popular method to consider is the debt snowball method. This debt repayment scheme recommends you to first throw as much money as you can toward your smallest debt while making minimum payments on your other debts. Once you pay off the smallest debt, you move on to the next-smallest debt until all your debts are gone.

This sounds simple enough, but it's hard to map out a debt snowball plan and know how long it will take you to become debt-free without any tools. The most helpful debt snowball calculator we've found is offered via Financial Mentor. This calculator lets you enter all your debts and respective interest rates, then offers a comprehensive month-by-month plan showing exactly how much you'll pay on each debt every month.

As your debt is paid off and you continue making on-time monthly payments, your credit score should slowly rise.

5. Debitize

Debitize is an app that links your credit card with your banking account. Every time you make a credit card purchase, the service withdraws that amount from your checking account and holds it in an FDIC-insured bank account. At the end of your billing cycle, the funds are used to pay your credit card bill in full. The result is that you can use credit as if it were debit. This lets you earn credit card rewards without risking you'll charge more than you can pay off.

One of the most important factors that dictates your credit score is your credit utilization ratio — how much you owe in relation to your credit limits. Eliminating debt from your life can have a marked impact on your credit score due to the fact it will lower your utilization to zero.

With Debitize, you can avoid debt, earn rewards, and take advantage of important consumer protections offered by credit cards. Best of all, the basic version of this app is free.

6. YNAB

YNAB (You Need a Budget) is a comprehensive budgeting app that can help you pay down debt, improve your credit, and build wealth. This tool helps users create their own "zero-sum budget," which is a type of budget that requires you to give each dollar you earn a job and live off your last month's income.

This app comes with comprehensive budgeting software and tracking tools that can help you stay on top of your expenses and manage your bills. Ideally, you will use the app to become more intentional with your spending and pay down debt. As your debt decreases and your credit utilization ratio drops, you may also see an improvement to your credit score.

While you can try YNAB free for 34 days, you'll pay $6.99 per month to use the app thereafter. In exchange for the fee, you'll get automatic bank syncing, free online money workshops, support seven days a week, and debt paydown tools that can help you reach your goals faster.

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